Zynga Shares Fall on News It Is Ending Plan for Gambling

“Zynga is making the focused choice not to pursue a license for real money gaming in the United States,” the company said in a statement. “Zynga will continue to evaluate all of its priorities against the growing market opportunity in free, social gaming, including social casino offerings.”

The announcement, which came on a day when Zynga reported quarterly results mostly in line with investor expectations, sent its shares down 13 percent, to $3.06 in after-hours trading.

Over the last year, Zynga’s business model has rapidly crumbled while it continued to lose online gamers to rivals. Executives have pleaded for time to turn around the company, arguing to investors that greater fiscal discipline and execution would stabilize Zynga’s position, while its foray into casino-style gambling could pay off handsomely in the long run.

That thinking has changed in recent months within the company’s upper echelons, with Mark Pincus, a founder, and his replacement as chief executive, Don Mattrick, returning to Zynga’s roots with free social games like FarmVille, which catapulted the company to stardom in 2009.

“We need to get back to basics and take a longer-term view on our products and business, develop more efficient processes and tighten up execution all across the company,” Mr. Mattrick said in a statement.

Zynga reported $231 million in quarterly revenue on Thursday, a 31 percent drop from a year ago, as the struggling publisher continued to lose players.

Zynga said the number of active monthly players dropped to 187 million this quarter from 306 million a year ago, its lowest since mid-2010. The company, which has acknowledged fundamental problems with its business model, went public in December 2011 at $10 a share.

Excluding certain items, Zynga posted a loss of a penny a share, compared with a penny-a-share profit a year ago.

Zynga reported $188 million in bookings, which is a measure of the value of virtual goods bought by players during the three-month period that ended June 30. That is a 38 percent drop from $302 million a year earlier. 

Dish drops bid for Clearwire, ending brutal bidding war

Dish Network has dropped its offer to buy Clearwire, probably clearing the path for a strengthened Sprint Nextel to complete its takeover of the struggling but spectrum-rich mobile operator.

 

Both SoftBank's US$21.6 billion acquisition of Sprint and Sprint's buyout of Clearwire are now on track for completion in early July, with the main remaining hurdle being U.S. Federal Communications Commission approval of the SoftBank-Sprint transaction. Together, those deals will create a stronger competitor to Verizon Wireless and AT&T, with fewer than half the subscribers but nearly twice the radio spectrum in major metropolitan areas, analysts say.

 

Dish drew Sprint into a bidding war for Clearwire in early January and dramatically drove up the price that Sprint would pay for its long-time network partner. Sprint's latest bid, which Clearwire's management accepted late last week, is $5 per share. That's up from its original offer of $2.90 per share late last year.

 

The satellite TV and Internet provider also attempted to buy Sprint itself, eventually pushing up the sum SoftBank would pay for the nation's third-largest carrier. Dish pulled out of bidding for Sprint last week.

 

Sprint already owns just over half of Clearwire, which has provided the network for Sprint's 4G WiMax service but has struggled financially since it was formed in 2008. Clearwire is expected to be a key asset for the new Sprint, which will use the company's spectrum to bolster its LTE service. Clearwire is already building an LTE network that Sprint has been planning to use in conjunction with its own.

 

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Stocks: Ending the quarter on a high note

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U.S. stock futures were mixed ahead of the open. Fed officials have been in damage control mode lately trying to quell fears that the central bank might soon end or scale back its bond massive bond buying program that has been a big driver of the bull market.

Yet in trying to allay investor fears, Fed governor Jeremy Stein might have inadvertently spooked investors. He said the Fed could consider tapering bond buying in September. But Stein also said investors were overreacting.

Fed chairman Ben Bernanke kicked off tumult in the stock, bond, and gold markets last week, when he said the central bank could start tapering later this year, if the economy continues to improve.

Related: Fed officials in damage control mode

The mere mention of tapering has sent bond investors scrambling for the exits. The yield on the 10-year Treasury note hit 2.65% earlier this week -- its highest level since August 2011 and well above the 1.6% in early May.

Gold prices got slammed as well. Prices are down 13% so far this month.

While June has been negative for investors, stocks are on track to end the quarter up 3%. Year-to-date, stocks are up 12% to 15%.

U.S. stocks rallied for a third day Thursday, as investors shook off concerns about waning central bank stimulus.

Related: Fear & Greed Index nudges up to fear

Embattled mobile company Blackberry (BBRY) reported first-quarter results Friday that fell short of analysts' forecasts. Shares fell 16% in premarket trading.

Nike (NKE, Fortune 500) shares edged lower in premarket trading, easing from strong after-hours gains following a strong earnings report. Shares of outsourcing and consulting firm Accenture (ACN) were lower after the firm cut expectations for its year-end results.

Shares of Pfizer (PFE, Fortune 500) edged higher in premarket trading after the drug maker announced late Thursday that it would increased its share buyback program by $10 billion.

European markets advanced in morning trading, while Asian markets ended in positive territory.

The benchmark Nikkei boomed on positive economic data out of Japan, adding 3.5%. The Shanghai Composite increased 1.5% and the Hang Seng closed 1.8% higher.